In truth, Anarchy is the lack of government due
to either a revolution or the collapse of the previous government due to
discontented citizens. While no government is in existence, no taxes are
collected, no science research is conducted, and no progress is put into
either City Improvements or Wonders of the World. If you can, try and stay
away from this form of government. And if you're going to be switching
government types often, attempt to get the Statue of Liberty wonder.

Despotism

Under this form of government, you have absolute
control over the people in your empire. While this gives you greater control
over your empire, the production capabilities within cities will be limited.
Furthermore, each unit produced above the city size will cost one Shield
per turn, and Settler Units eat one unit of food per turn. In terms of
keeping the citizens in each city happy, three Military Units within a
city represent martial law, resulting in up to three citizens being kept
content. When ruling under despotism, the farther cities are away from
your capital city, the higher corruption and waste will be. Finally, the
Tax, Science, and Luxuries rates that you set cannot go higher than 60
percent, and the production capabilities of terrain squares are reduced.
In the early stages of a simulation, operating under this form of government
is actually somewhat beneficial, but you'll soon have to change to another
type of government to grow into a productive empire.

Monarchy

I usually just skip over this form of government
straight to Republic. But if your going to be having a lot of troops crossing
oceans or you're going to be at war alot, this is the government of my
choice. Under a Monarchy, you rule by divine right over your empire. This
form of government gives less control to the ruler than despotism but makes
the population happier and more productive. But the drawbacks to Monarchy
are the same as despotism, although much less severe. The thing most people
like is placing cities under Martial Law with up to 3 military units within
the city to make 3 citizens content. Another great thing is it will allow
up to 3 military units to leave the city radius without any financial burden.
The Tax, Science, and Luxuries rates cannot go above 70 percent.

Fundamentalism

This is a new form of government that's available
in Civ II. This form of government is based on a set of beliefs that usually
derive from religion, and both the population and the rulers are totally
dedicated to their beliefs. They are willing to do just about anything
to uphold them. Fanatics are a new type of Military Unit that can only
be created under this form of government, which don't penalize you financially
period. All other units don't penalize you until they out number 10. Under
this form of government, no citizens are ever unhappy. This means that
your individual cities will never enter into a state of civil disorder
and that corruption is kept at zero. The Tax, Science, and Luxuries rates
cannot be set above 80 percent under a Fundamentalist government. Also,
the City Improvements and Wonders of the World that are dedicated to making
citizens content or happy will now generate money, because the population
is happy by default. The drawback to this form of government is that all
science production is cut in half, so your empire's progress toward developing
new advances will be limited. Finally, if an enemy spy or diplomat (terrorist)
is captured, the penalty for them will be lighter than the death penalty,
which is standard under other forms of government.

Communism

This isn't socialism like in old mother Russia,
this is the government Russia was striving towards. All goods and production
are commonly owned under this form of government; however, you (the leader)
still retain all decision-making powers. There is no corruption under a
Communist government, and all Spy Units produced are immediately given
Veteran status. The Tax, Science, and Luxuries rates cannot be set above
80 percent. When you place up to three military units within a city, under
this form of government, two unhappy citizens are made content per unit.
If you're going to be making war and don't want your taxes taken up by
corruption or your science taken up by fanatics, this is the government
for you.

The Republic

This is usually my government of choice until
I get to Democracy. This form of government represents a political system
where elected representatives exercise power over the people who are separated
up into numerous city states. In the game each city controlled by your
empire represents a single state. Even though you can't maintain martial
law in a city under this government, trade is boosted by personal and economic
freedoms to the point that every space that is already producing trade
produces 1 extra trade arrow. Because of this trade increase, you can easily
afford to raise luxuries to at least 20% to keep people content. When forming
trade routes under this form of government, you're even given extra trade
bonuses. Another plus is that corruption is very low, compared to other
forms. But the bad side to having all this prosperity in your Empire is
that everything you do has to be OKed by the senate. And the senate will
almost always rule for peace with other civilizations to the point of going
behind your back to sign cease fires and peace treaties. Another problem
is that you must bear the full cost of fielding an army. Every unit costs
1 Shield, every settler unit costs 2 food of support, and troops that are
outside the city radius make 1 citizen discontent. Also, every Stealth
bomber, missile, or helicopter, regardless of location, causes 1 citizen
to become discontent in it's home city. These also cause 1 discontent citizen
in the city in which they are based. The maximum rate possible for Taxes/Science/Luxuries
is 80%.

Democracy

This is the ultimate form of government in Civilizations
II. This form of government offers its citizens the ultimate in political
and economic freedom. Like the Republic, every square already producing
trade produces 1 extra trade arrow. Also, your cities and troops cannot
be bribed due to extremely high patriotism. Trade bonuses are even higher
under this form of government. Corruption and waist is non-existent due
to everyone trying to get ahead in the world. Again, like under Republic,
you have to bear full cost of your military. A military unit costs 1 Shield,
a settler costs 2 food, and every military unit outside the city radius
makes 1 citizen discontent. Every Stealth bomber, missile, or helicopter
also creates a discontent citizen each. Your senate will feel free to alter
your foreign policies, just like under The Republic. I usually get to this
form of government just to build up my empire and its knowledge advances,
then I change to Fundamentalism and invade. One very good way to know if
you're ready for Democracy is if you are at 20% Luxuries and still need
2 entertainers, then you're not yet ready for it and need to switch to
a more controlled form of government. Also, Democracy is very fragile.
If one of your cities is in civil unrest for more than 1 turn, then your
government will fall leaving you under Anarchy. Losing precious time, you
probably needed to upgrade your cities.